Trade rift with Japan seen easing

January 17, 1994|By New York Times News Service

TOKYO -- Japan has prepared a plan for opening its public-sector construction market for bidding by foreign companies, making it more likely that Washington will not impose trade sanctions on Thursday, a U.S. official said yesterday.

"I can't tell you it's done," said the official, who has been briefed on the Japanese plan. "But I'm feeling better about it. I'm hopeful that this will be OK."

The Clinton administration canceled plans to impose sanctions on Japan in October after Tokyo promised to open its construction market. But the administration said it would impose the sanctions if a satisfactory plan to carry out the promise was not drawn up by Thursday.

The so-called action plan to open the construction market is expected to be approved by the Japanese Cabinet tomorrow. The United States has not seen the plan but has heard Japanese officials describe it in talks in Tokyo last week.

The American official, who requested anonymity, dismissed as "inaccurate" reports in the Japanese press that Washington had already agreed to Japan's plan.

The United States has long complained that Japanese bidding procedures make it virtually impossible for foreign companies to win public-works jobs. But calls to reform the system have also mounted within Japan, as one case after another has come to light in the last year of contracts being awarded based on collusive bid-rigging or bribery of public officials.

In the new plan, which is said to address many of the concerns of the United States, Japan has promised to award contracts based on open bidding for central government construction projects worth at least $6.4 million. For design and consulting services, projects worth at least $640,000 will be awarded based on open bidding.

For construction projects of some prefectural and local governments, and of government-affiliated entities like the Japan Railway companies, open bidding must be used for projects of $21.3 million or more.

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